Question 2: XYZ company purchased merchandise during 2017 on credit for $300,000; terms 2/10, n/30. All of the liability except $60,000 was paid within the discount period. The remainder was paid within the 30-day term. At the end of the annual accounting period, December 31, 2017, 90% of the merchandise had been sold and 10% remained in inventory. The company uses a periodic system.

Required:

a) Assuming that the Net method is used for recording purchases, prepare the entries for the purchase and two subsequent payments.